A Critical Review of the Application of Neo-institutional Theory on International Management.

This paper is part of a growing body of research that examines and addresses the contextual limits of neo-institutional theory. An increasing number of authors have used theoretical insights from the neo-institutional perspective to study multinational corporations. However, by virtue of the cross-border nature of MNCs' structure and transactions, institutional duality arises. This gives rise to the argument that MNCs can exercise agency to make strategic choices over organizational practices, and are able to introduce institutional change to their host economies (Kostova, Roth & Dacin 2008). In this paper, we study Walmart's acquisitions in Mexico, Germany, and Japan. Based on the findings, we discuss the provocations advanced by Kostova et al. (2008) and generate several alternative propositions as part of our contribution to the theoretical refinement of the neo-institutional perspective with respect to its application for MNC study. We contend that, for an emerging market in which the institutional system is in a constant flux, MNCs may have more room to engage in negotiation and partial reconstruction of its institutional environment, whilst in institutionally stable environments, MNCs have less power to achieve legitimacy for their ways of doing business. [ABSTRACT FROM AUTHOR]